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A clash of appeals over patentability

In Duns Licensing Associates, L.P., T0154/04, the Technical Board of Appeal of the EPO has delivered an opinion that expressly criticizes the approach to the exclusion from patentability of computer implemented inventions and business methods formulated by the Court of Appeal in the Macrossan/Aerotel case, subsequently applied by the Patents Court in Capellini. In unusually strong language, the TBA has even suggested the Court of Appeal has failed to apply Article 52 of the EPC in good faith.

The facts

The Appeal concerned an invention for the estimation of sales activity of a product at non-reporting sales outlets, based on sale information from reporting outlets. The patent covered a program able to apply a weighting mechanism to available product sales data using a function of the distance and geographical location of the reporting outlets.

The patentee argued that the invention covered by the patent provided a more accurate system of estimating sales or product distribution than previous methods and that this was a 'technical contribution', not just a business method or computer program.

The TBA rejected the appeal holding that the claimed invention did not meet the requirements of patentability set out in Article 52 EPC.

You've wrong and we're right...

However, the actual decision pales by comparison to the remarkable way with which the TBA then sets about the "contribution" or "technical effect" approach, as they call it, captured in the four step approach formulated by Jacob LJ in the Macrossan/Aerotel case. Apparently suggesting that the Court of Appeal has been either legally naïve, or perhaps even disengenuous, the TBA said there was confusion between the 'legal' concept of invention that the TBA uses and a 'layman's' ordinary understanding of invention

"The "technical effect approach" endorsed by Lord Justice Jacob in the Aerotel/Macrossan judgement…seems rooted in this second ordinary meaning of the term invention, a practice which…is not consistent with a good-faith interpretation of the EPC"

The TBA goes on to say:

""The technical effect approach (with the rider)" applied in the Aerotel/Macrossan judgment is irreconcilable with the European Patent Convention also for the further reason that it presupposes that "novel and inventive purely excluded matter does not count as a 'technical contribution'"…This has no basis in the Convention and contravenes conventional patentability criteria."

In essence the TBA's objection seems to be that the EPC encodes no concept of 'technical contribution'. Instead, the TBA refers to 'technical features', which are inherent in the concept of invention – 'invention' being a term that is provided for in Article 52. The EPC insists that the correct approach is to allow a claim with any combination of technical and non-technical features to pass the exclusions, but when assessing its inventiveness and novelty to base this only on the technical features and not the non-technical features1. Quite how this makes any difference in practice is unclear.

Whose business is it anyway?

It is interesting in this case that the patentee suggested the same questions to be referred to the Enlarged Board of Appeal, with some additions, as those suggested by Jacob LJ in Macrossan/Aerotel. Although Jacob LJ was standing largely in the UK camp in Macrossan/Aerotel, he originally formulated these questions as an invitation to the EPO to resolve its approach to patentability (he thought the TBA itself had more than one).

Back in March 2007, the EPO President, Alain Pompidou, had gently rebuffed these suggested questions on the basis that there was "insufficient difference" between approaches to the exclusions in the current Board of Appeal decisions, to warrant consideration by the higher body.

This position is emphatically maintained in Dun Licensing, where a referral to the Enlarged Board was refused because, as well as regarding it as insufficiently important a point of law to require uniformity of approach,

"…a decision deviating from an opinion given in another decision of the board of appeal, a diverging opinion expressed in decisions of different boards, or a deviation from some national jurisprudence – from example from the UK case law of the court of appeal… -- are not per se valid reasons for referral."

The TBA was also keen, despite any influence Jacob LJ might seek, to assert its independence over national courts…:

"…in the proceedings before the European Patent Office, [national] considerations do not exonerate a board of appeal from its duty as an independent judicial body and to decide in last instance in patent granting matters."

…and express complete satisfaction with its own approach:

…the Board has no doubts how to answer the questions on the basis of the Convention, following the established case law on patentability of inventions."

Who cares ?

This case reveals a rift between the approaches to patentability of the EPO and the UK, which the reformulation of UK law by the Court of Appeal in Macrossan/Aerotel apparently did little to address. This is despite the Macrossan/Aerotel reformulation, which largely relegates the traditional UK technical contribution test to a fourth (possibly redundant) step. This is an approach that the EPO has objected to for some time, but it is difficult to understand why they have been so irritated by it post-Macrossan/Aerotel2.

A number of issues are now certain:

the EPO considers the UK approach to the patentability of computer related inventions, business methods and the other exclusions under Article 52(2) is different to that of the EPO; and

the TBA is completely satisfied with its approach and has no intention of referring any questions to the Enlarged Board.

Unfortunately, it is not certain what owners of patents in these areas of technology are supposed to think about this apparently divided approach to patentability. In particular, will it result in different decisions between the UK and the TBA3 ?